Friday, October 1, 2010

Update!

Governor Vetoes C.A.R.-Sponsored

Anti-Deficiency Bill

On Thursday, Governor Schwarzenegger vetoed SB 1178 (Corbett), C.A.R.'s sponsored bill that would have expanded anti-deficiency protections. In his veto message, the Governor made clearhis view that the bill interferes with an existing contract. While disappointed in the Governor's misinterpretation of the bill, C.A.R. is grateful to the almost 13,000 California REALTORS(R) who urged him to sign the bill by responding to the Red Alert.

C.A.R. sponsored SB 1178 to better protect homeowners going through foreclosure. SB 1178 would have ensured that homeowners keep the same "anti-deficiency" protections they have in the original loan after the loan has been refinanced.

California's anti-deficiency protection for "purchase money" mortgages says that if a homeowner defaults on a mortgage used to purchase his or her home, the homeowner's liability on the mortgage is limited to the property itself. The law has worked well since the 1930s to protect borrowers, ensure the quality of loan underwriting and allow borrowers brought down by financial crisis to get back on their feet.

Unfortunately, the 1930s law hasn't kept up with current times. Current law doesn't apply to loans used to refinance the original purchase debt, even if the refinance was only to gain a lower interest rate. Recent years of low interest rates have induced tens of thousands of homeowners to refinance their mortgages. During those years, almost no one realized that refinancing their mortgage to obtain a lower rate, they were forfeiting their protections and were becoming personally liable on the new note.

SB 1178 would have corrected this injustice by extending anti-deficiency protections to those who have refinanced their loans.

Thank you again to everyone who joined C.A.R.'s Government Affairs Team and fought for our clients.

Moderator

A broker associate at Terra Real Estate Group focused on investment and lending opportunities with experienced clients involved in land development, investment acquisition and property disposition. Pursuant to his experience as a project manager in all facets of commercial real estate, many clients utilize his experience with complex legal issues to manage distressed "work out" situations.

As a Certified Commercial Investment Member (CCIM) with 18 years of commercial real estate experience, he has provided his clients with successful direction in business development, strategic marketing, organizational leadership, project management, and competitive product positioning in numerous transactions.

He has also developed strategic wireless tower installations throughout California and Nevada for private investors and his own account, being fully responsible for site selection, business development, technical and application knowledge, customer service, and project management through construction completion.

As a 3rd generation real estate broker, he remains involved in the operations of a family-owned Florida company, which has successfully managed and maintained an investment portfolio of warehouse, office, single family, and multi-family properties for their clients and family.